SUSI Partners, through SETF, has acquired a 100 MW portfolio of front-of-the-meter battery storage systems in South Texas in partnership with SMT Energy, a developer, and operator of renewable energy and energy storage projects.
The portfolio comprises ten ready-to-build projects with a capacity of 10 MW each. The assets are expected to start commercial operation in the first half of 2023.
SMT Energy will oversee construction and operations. Both Companies intend to establish a continuing partnership to build energy transition infrastructure across the United States.
Texas’ electricity grid has been under high scrutiny, with both winter storms and extremely high summer temperatures presenting challenges that are only expected to increase in frequency as climate change progresses. While renewable energy generation has proven invaluable in the face of recent spikes in power demand, its integration has far outpaced the buildout of energy storage capacity, which is crucial to counterbalance intermittencies in power supply. The need for storage is further accentuated by pending retirements of thermal generation plants, which are expected to keep price volatility high throughout the 2020s.
The transaction marks SUSI’s second in the U.S battery storage market after investing in a behind-the-meter portfolio of Californian assets through its dedicated Energy Storage Fund in 2019 and the first battery storage deal executed through its flagship energy transition fund – SETF.
With this transaction, SETF’s portfolio now covers investments from renewable energy production over energy efficiency to energy storage and integrated customer energy solutions.
Earlier this month, Broad Reach Power, a utility-scale battery storage platform, closed a $160 million project financing for 17 operating battery energy storage systems in Texas and one in California. The financed projects are front-of-the-meter, utility-scale assets using lithium-ion technology totaling 390 MWh.
According to Mercom’s 1H and Q2 2022 Funding and M&A Report for Storage, Grid & Efficiency, there were 13 energy storage M&A transactions in 1H 2022 compared to nine in 1H 2021.